The Protecting Americans from Tax Hikes (“PATH”) Act of 2015, enacted in December 2015, requires organizations to notify the IRS if they desire to operate under Section 501(c)(4) of the Internal Revenue Code (“Code”). (Only organizations described in Section 501(c)(3) of the Code are required to apply for and receive recognition of their tax-exempt status;… Continue Reading

On June 21, 2016, the Internal Revenue Service (IRS) issued anticipated proposed Treasury Regulations prescribing rules under Section 457 of the Internal Revenue Code for the income taxation of deferred compensation arrangements for employees of tax-exempt organizations and state and local governments. The IRS also released new proposed Treasury Regulations under Code Section 409A.

On February 19, 2016, the IRS and Treasury Department issued proposed regulations regarding (i) prohibitions on certain contributions to Type I and Type III supporting organizations and (ii) requirements for Type III supporting organizations. These proposed regulations reflect changes to the law made by the Pension Protection Act of 2006, which changed the requirements an… Continue Reading

Every January, the IRS releases a series of revenue procedures detailing how organizations can obtain private letter rulings and determinations and listing issues on which the IRS will not rule during the coming year. This year’s procedures make clear that tax-exempt organizations will no longer be able to receive a ruling or any comfort from… Continue Reading

On September 16, 2015, the IRS issued proposed regulations concerning the time and manner for donee organizations to file information returns that report required information about charitable contributions. The proposed regulations would implement an exception to the requirement that a taxpayer who claims a charitable contribution deduction for any contribution of $250 or more to… Continue Reading

On March 31, 2015, the Commissioner of the IRS reported in a speech to the National Press Club that the IRS is “under new management” due to major changes in management staff over the last few years. Many of these management changes, as well as changes in organization and procedures, were in the Tax-Exempt and Governmental… Continue Reading

Late last year, the Internal Revenue Service (“IRS”) issued a letter ruling, PLR 201446025, providing that, in certain instances, a nonprofit corporation exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and incorporated in State A was not required to file a new application for tax-exempt status (IRS Form 1023) when… Continue Reading

The Advisory Committee on Tax Exempt and Government Entities (“ACT”), an IRS advisory panel, made several recommendations on issues relating to unrelated business taxable income (“UBTI”) in its annual report to the IRS (the “Report”). In recent years, the IRS has focused on UBTI reporting for tax exempt organizations; issues relating to UBTI reporting were addressed… Continue Reading

The IRS recently issued Notice 2014-4 (the “Notice”), which provides interim guidance for Type III supporting organizations seeking to qualify as functionally integrated by supporting governmental organizations. In December 2012, the IRS issued final and temporary regulations that, among other things, set forth the requirements for an organization to qualify as a functionally integrated Type III supporting… Continue Reading

Tax-exempt organizations that have had their tax-exempt status automatically revoked because of failure to file required annual returns for three consecutive years can follow new procedures for seeking reinstatement of their tax exemptions. The IRS released these procedures in Revenue Procedure 2014-11 on January 2, 2014. The Revenue Procedure, which is the first IRS guidance… Continue Reading

Earlier this year the IRS issued drafts of the 2013 Form 990, Return of Organization Exempt From Income Tax, and 2013 Form 990 Instructions. Although there were no major changes to the Form 990, there were several changes and clarifications in the draft instructions, including: Short Period Returns. The draft instructions clarify that a short… Continue Reading

The Advisory Committee on Tax Exempt and Government Entities (ACT) has released its annual report and recommendations to the IRS on selected issues concerning exempt organizations, employee benefit plans, tax-exempt financing, and state and local governmental entities. See our post about last year’s report here. The annual ACT report is always an important indicator and… Continue Reading

The IRS released its Final Report on its five year study of the audit results of colleges and universities. Lois G. Lerner, Director of the Exempt Organizations division of the IRS announced the “long awaited” posting of the report. In 2008, the IRS sent a 33 page questionnaire to 400 randomly selected colleges and universities. In 2010,… Continue Reading

By
Lisa A. Berkowitz Herrnson on April 29th, 2013Posted in IRS Filings

Correction of Plan Errors Final Internal Revenue Code Section 403(b) regulations which became effective January 1, 2009 require that plan sponsors adopt written 403(b) Plan documents. A 403(b) Plan is a form of defined contribution retirement plan that may only be offered by employers that are tax-exempt entities under Section 501(c)(3) of the Internal Revenue… Continue Reading

IRS Exempt Organizations group has sent out more than 1,300 questionnaires to self-declared Section 501(c)(4) social welfare organizations; 501(c)(5) labor, agricultural or horticultural organizations; or 501(c)(6) business leagues. The questionnaires are part of IRS efforts to increase voluntary compliance, learn more about self-declared exempt organizations, and determine whether self-declared exempt organizations are complying with applicable tax-exempt… Continue Reading

At the end of January, 2013, the IRS Exempt Organizations Group (“EO”) released its annual report, highlighting EO’s 2012 accomplishments and outlining its priorities for 2013. This year’s report was significantly more detailed and informative than last year’s report and workplan. Some accomplishments and priorities of interest are described below, with something for nearly everyone… Continue Reading

The IRS continues to implement the “three years and you’re out” rule for Form 990 non-filers added by the Pension Protection Act of 2006 (the “PPA”). That legislation amended Section 6033 of the Internal Revenue Code to provide that exempt organizations required to file a Form 990-series return (i.e., a Form 990, Form 990-EZ or… Continue Reading

Many practitioners have been anxious to leaf through regulations to confidently determine whether an organization is a “functionally integrated” or “non-functionally integrated” Type III supporting organization, and the implications of either classification. On December 28, 2012, the Internal Revenue Service released the long-awaited final regulations for Type III supporting organizations, as well as temporary regulations… Continue Reading

The IRS and Treasury Department have released their annual Priority Guidance Plan (the “Plan”) for the 2012-2013 fiscal year. The 35-page Plan is available here and includes thirteen projects directly related to Exempt Organizations. At least five other projects, such as final regulations under Section 170 regarding charitable contributions and guidance on Section 403(b) plans,… Continue Reading

The Internal Revenue Service (“IRS”) has extended the filing date to February 1, 2013 for an eligible exempt organization affected by Hurricane Sandy that previously had its exempt status revoked and is now applying for the reinstatement of its status. As we have said in this blog entry, the Pension Protection Act of 2006 added… Continue Reading

In response to the severe damage caused by Hurricane Sandy, the IRS has issued several news releases that provide guidance to charitable organizations, employers, and individuals who want to help victims of Hurricane Sandy.

The IRS recently issued proposed regulations amending the rules applicable to a private foundation’s good faith determination that that a foreign grantee is the foreign equivalent of a public charity or private operating foundation, grants to which will be “qualifying distributions” and not “taxable expenditures.” Most significantly, the proposed regulations expand the class of practitioners… Continue Reading

Tax-exempt section 501(c)(4) organizations are defined by the Internal Revenue Code as “social welfare organizations.” Treas. Reg. section 1.501(c)(4)-1(a)(2) provides that the organization must be “primarily engaged in promoting in some way the common good and general welfare of the people of the community.” Some members of Congress and the IRS have recently taken an… Continue Reading

On July 31, 2012, the IRS issued Notice 2012-52 (the “Notice”), providing long awaited confirmation that a charitable contribution to a limited liability company that is wholly owned by a charitable organization, and classified as a disregarded entity for U.S. federal income tax purposes (an “SMLLC”), will be treated as a contribution to a branch… Continue Reading